- Drug distributor McKesson (NYSE:MCK +2.6%) announces that it will combine its Technology Solutions unit with tech firm Change Healthcare Holdings to create a new healthcare information technology company with pro forma annual revenues of $3.4B. McKesson will own ~70% of the combined entity while Change will own ~30%.
- $6.1B in debt will fund the transaction, including $2.7B to retire existing Change Healthcare debt, $1.25B in cash payments to McKesson and $1.75B in cash payments to Change stockholders. The remainder will be used for transaction-related expenses. Annual synergies are expected to be more than $150M by the second year.
- The combined company will deliver a broad range of solutions aimed at lowering healthcare costs, improving patient access and outcomes and simplifying the transition to value-based care for providers, payers and consumers.
- McKesson will transfer the majority of its McKesson Technology Solutions businesses to the venture, except RelayHealth Pharmacy and its Enterprise Information Solutions (EIS) unit. The company also announced today that it intends to explore strategic alternatives for the EIS business.